absolute and relative poverty 4.2.1

Question 1

Absolute poverty

Answer 1

-Measure of poverty that focuses on a fixed, minimum standard of living necessary for basic survival
-Expressed in terms of income and consumption below a certain threshold

Threshold:
-Specific threshold set as income required to meet basic such as food, shelter, clothes

Focus:
-Meeting basic human needs and ensuring a minimum standard of living

Applicability:
-Commonly used in international comparisons - assessing basic needs in developing countries

Policy implications:
-provide basic necessities to those who cannot afford them

Question 2

Relative poverty

Answer 2

-A measure that considers a persons income or resources in comparison to the overall standard of living within their society
-Concerned with inequality and social exclusion

-focus on bridging gap between rich and poor

-depends on income distribution - fall significantly below median income

-more relevant in developed countries with higher living standards

-policies involve measures to reduce income inequality

Question 3

measures of absolute poverty

Answer 3

• Based on income/consumption levels relative to a fixed poverty threshold
• poverty line
• assess whether individuals can afford basic needs - food, shelter, healthcare, education
• Cost of basket of goods

Question 4

Measures of relative poverty

Answer 4

• Income inequality indices - gini coefficient or palma ratio - quantify income distribution
• Percentiles
• Subjective measures - surveys/ questionnaires

Question 5

Causes of changes in absolute and relative poverty: economic factors

Answer 5

• Growth - overall income and GDP increase - reduce absolute poverty - provide more resources to meet basic needs
• Income inequality - increase in relative poverty even in prosperous societies

Question 6

Causes of changes in absolute and relative poverty: social and demographic factors

Answer 6

• Population growth - strain resources - AP
• Age and gender - vulnerable groups - women and children - more prone to poverty - limited employment/education

Question 7

Causes of changes in absolute and relative poverty: Gov policies

Answer 7

• Social safety nets - reduce both poverties - providing support
• Tax and redistribution - progressive - reduce income inequality - reduce RP

Question 8

Causes of changes in absolute and relative poverty: global factors

Answer 8

• Aid - reduce poverty
• Globalisation - changes in trade/ labour markets
• De-industrialisation - loss of jobs